Indian privatisation got the thumbs-up from the capital markets when investors bid over 10 times the number of government shares offered for sale in Maruti, India's biggest car-maker now controlled by Suzuki Motors.
Global and local investors bid up the price on Maruti shares from Rs115, the floor price of the IPO, to Rs125 when the offer closed on June 19. The government exercised a greenshoe option, increasing the number of shares sold by 10% to 27.5% of Maruti's shares, which fetched it close to Rs10 billion ($213.5 million).
That makes the Maruti sale the largest book-built IPO in India, and has rallied a stock market emerging from a year-long slump. Lead manager Kotak Bank and co-managers ICICI Securities and HSBC say global investors were among the first to bid and the issue sold out on the first day.
Among those who bid were funds managed by Franklin Templeton, Merrill Lynch, Deutsche, Capital International, Citigroup and Schroders. Not all of them would have got Maruti shares. The government decided to allot 60% to retail Indian investors, hoping to keep investor interest alive and prices firm once the shares list in early July.